Christine Milne (Tasmania, Australian Greens) Share this | Hansard source

I rise today to speak on this Labor 2013-14 Budget Savings (Measures No. 1) Bill 2014. What an interesting situation. We have so much talk about tax reform—when what we are actually talking about is a tax grab. Tax reform suggests you might seriously consider how you are raising taxes in this country and for what purposes you are raising them and whether that needs to change in the 21st century. But no—tax reform is simply a word for 'How can we get a bigger tax grab from the Australian people?'

The first question you need to be asking if you are serious about tax reform is: where do you raise the money to spend on a public purpose and, in raising that money, how are you trying to shift the economy and the society to respond to the overwhelming challenges of the time? The overwhelming challenge of this century is global warming, the resource extraction of a planet going to nine billion people, where resource extraction is completely unsustainable. At the same time we have overwhelming wealth and income inequality.

If you are looking at the two megatrends, one is global warming, unsustainable and non-renewable resource use around the planet and destruction of ecosystems and, at the same time a widening gap between the rich and poor, then genuine tax reform would look at tax and the bads—that is, the extraction and unsustainable use of resources that are destroying ecosystems, destroying the atmosphere, turning the oceans acid and, at the same time, reducing the gap as much as you can, with structural change to make sure that you reduce income and wealth inequality. That is what genuine tax reform would do. That is why I was extremely proud of the fact that the regime we brought in to address global warming in this country was genuine tax reform. It was the first major tax reform in decades because it said, 'We need to bring down greenhouse gas emissions in this country so we are going to put a price on pollution because the earth cannot sustain the level of waste being put into atmosphere and oceans from the burning of fossil fuels. So we will tax that pollution. We will charge for that pollution. In taxing the bad, we will use that to relieve the tax burden on the poorest and the least able in our democracy.' Is that not genuine tax reform addressing those two megatrends in this century? Of course it is.

What we did was to say, 'Let us make sure that from those who are making the mega profits, we socialise the costs of their work, to pay for that cost.' We said that those people who are burning fossil fuels will pay for it through a carbon price. We introduced the carbon price and at the same time we said that low-income earners should get a break. So we trebled the tax-free fresh threshold. Before, once you earned $6,000 in Australia, you started to pay tax. After the carbon price it went up to $18,200. So it meant an incredible amount to a large number of people. To give an example, it gave tax relief of $300 a year to anyone earning up to $65,000 a year or $600 for people earning $20,000 a year. When you talk about people working part-time—students, low-income earners—it gave them a substantial tax break and, at the same time, it said to BHP and to the Rios of this world, 'You can stop paying for the cost of the extreme weather events that you are imposing on the rest of the community.'

Not only did they run a mega campaign against the mining tax and the carbon price but at the very same time as they were out there running their ad campaign on the Australian community saying, 'What jolly good fellows are we, the mining industry!' they had set up marketing hubs in Singapore to avoid their tax. The biggest tax avoiders in the country were the people saying, 'We shouldn't have to pay a carbon price, we shouldn't have to pay a mining tax.' They were setting up their hub in Singapore, sending billions offshore and paying multimillions to their chief executives who were laughing all the way to the bank as they laughed at the Liberal government that was prepared to give them even more tax relief than they deserved. Now who is going to pay the price of global warming? Who is going to pay for the damage to the infrastructure around Australia from extreme weather events? It is the community, who have to pay through the tax take. Now what we have is a government that is moving to shift the tax burden once again away from the Gina Rineharts of this world and away from the Rios and the BHPs, and onto the lowest income earners in the country.

As my colleague Senator Whish-Wilson said a moment ago, these are really dishonest activities of a government. If the government was honest when they came into power and moved to abolish the carbon price, they should have, at the same time, said to the Australian people: 'Look, we were taking billions of dollars from the big polluters, and we were recycling it through to you, the people. Now that we have decided not to charge those companies those billions of dollars, we are going to take the tax breaks that you had away from you. We are going to reduce the tax-free threshold back down to $6,000, and you will all start paying the tax again.' But they did not. What they said was, 'We will forgo the revenue from the carbon price, and we will maintain those compensation measures'. Anyone with half a brain could see that that left a mega hole in the budget—$18 billion over the forward estimates. It is an $18 billion hole that Prime Minister Abbott decided he wanted. He wanted a big tax hole, and he wanted to add to that tax hole by abolishing the mining tax, which the Treasurer, Mr Hockey, at the time identified as worth around another $6 billion.

It was an amazing effort by a Prime Minister to say: 'Rather than see the tax on the richest corporations and the biggest polluters in the country, we want to impose it on ordinary people. We want to do that.' That is exactly what the government did. In order to disguise that, they went out last year saying: 'We'll keep the compensation from the carbon price but, hey, you have to pay a Medicare co-payment, we are going to deregulate universities and charge students more, we are going to reduce pensions, and we are going to attack the poorest in this country in order to recoup the hole that we made when we decided to let the big polluters and the big miners off the hook.' That is the disaster that we are now inheriting here in Australia.

What is very interesting is the title of this bill. It shows that—to the extent to which we have a government talk about failure of grown-up government—we now have what can only be described as student politics. We have a government that is introducing a bill called Labor 2013-14 Budget Savings (Measures No. 1) Bill 2014. The reason that they have done that is, again, the cynicism of politics. In the agreement on the carbon price that the Greens signed with the Gillard government, this tax-free threshold increase was locked in to go up from $18,200 to $19,400. Once the ink was dry, what the Gillard government then did—sneakily, in my view—was defer that increase to $19,400. That is why the government have decided to call it Labor's budget savings measures.

Interestingly, last year, when this very same proposition was put to the Senate at this time, Labor stood up in here and said that they would not stand for the tax-free threshold being wound back, or for the projected increase not going ahead. They would not stand for it last year, and this year they are standing for it. Why? Because 12 months has gone past, because they know that politics moves so fast that the community will not have put two and two together, and they will not have realised that what Labor are now doing is exactly the opposite of what they did last year. There is just no consistent philosophical view from either side of government—except, you can guarantee with the Liberals and the Abbott government that every time the word 'tax' is mentioned it means mega tax relief for the wealthiest and the richest in the country. You can guarantee that, when it comes to Labor Party on the issue, there is no consistent philosophical view. It is wherever is pragmatic at the day that they will do. That is why last year they voted against this proposition, and it is why this year they are going to support the government in voting for this proposition.

I can tell you that, where the Greens are concerned, there is a consistent philosophical view which says very clearly that we should be raising money by taxing the 'bads', and we should be reducing the impact on low-income earners and on those people who are suffering the most in our community wherever we can. That is precisely what we need to be doing. This is not only in terms of the carbon price compensation; with the mining tax we see the government taking away the low-income superannuation investment of $500 a year to people earning less than $37,000. Of course, that is ultimately to go in the deal that the government made with Clive Palmer, Senator Lambie, Senator Lazarus and Senator Wang last year. They all voted to take away the low-income superannuation contribution in the mining tax.

The mining tax abolition cost the Australian community $6.5 billion over the forward estimates. The miners are laughing all the way to bank, and low-income people are suffering from it. With their superannuation, the increase in super from nine per cent to 12 per cent was delayed out to 2025. We are already seeing that—every which way you look at it—the people in Australia who are the ones who have suffered the most are the ones who continue to suffer the most. The richest tax avoiders get away with it, and they get away with it time and time again. What should we be doing? What we should be doing is recognising that—as the International Energy Agency has done this week, and as every other country is now doing as it faces up to the challenge of global warming—we have to absolutely and rapidly change this economy to a low carbon/zero carbon economy. This is why the Greens have said clearly that we need net carbon zero by 2040, that we need to be out to an 80 per cent reduction in emissions by 2030 and that we need to bring that down to 50 per cent at least by 2025

Now, if we are going to do that—as the International Energy Agency says—we have to increase energy efficiency in industry, buildings, and transport; we have to reduce the use of the least efficient coal-fired power plants, and ban their construction; we have to increase investments in renewable energy technology; we have to phase out fossil fuel subsidies; and we have to reduce methane emissions in oil and gas production—and yet, every which way the Australian tax system is considered, we have a situation where this government has moved to destroy those initiatives which would bring down greenhouse gas emissions. That is the task that we should be addressing.

We should also be addressing the other overwhelming trend—that is, wealth accumulation by the very smallest group of people of Australia, and the increasing stress on the remainder of the population. Mr Acting Deputy President, I can tell you that there are an awful lot of people out there who are now sitting back but who did not realise at the time that the reason they had the tax-free threshold was because of the carbon price, and because of the fact that the big polluters were paying so that ordinary people could have a tax break. That was surely a very good idea. At the same time, we had the government out there at the time telling people that the cost of living would fall because the carbon price was going—that everybody would be $500 better off. Well, I am yet to find anyone who is $500 better off because the carbon price has gone. And that is because the main driver of electricity prices was not the carbon price, nor is it the Renewable Energy Target; the main driver of electricity price hikes is the network system. And is anyone interested in fixing that? Not in the government, that is for sure, and not in Labor either. There are very clear measures you could take in the National Electricity Market to address this, but neither Liberal nor Labor are interested in doing so—because the network system is a back-pocket tax. Talk about axing the tax! If you were serious about axing the tax, you would take on the electricity networks and the National Electricity Market in Australia.

The cost of living has not come down. Emissions are now going up. People are more anxious than ever about extreme weather events. The insurance industry is absolutely worried now about how they are going to cover the costs of insurance. And who is going to pay, Mr Acting Deputy President? If this government has its way, it will not be the big miners, it will not be the BHPs and the Rios, and it will not be the Gina Rineharts of this world who will pay, in order to deal with not only mitigation but also adaptation—it is not they who are going to contribute to reducing income and wealth inequality in this country; in fact, they want to drive wages and conditions even lower than they already are. It will be ordinary people who will pay.

So I stand again to say: if we want genuine tax reform in this country, this tax white paper had better address what it is that tax is meant to do. Where is it going to come from, and what is the rationale for why it would come from that sector of the community? And how is it going to be distributed in order to reduce the greenhouse gas emissions and the costs of global warming, and to reduce the gap between the rich and the poor? That is what we need to be doing with our tax system. I really am appalled: we had a situation where people in here were standing up and dancing when the carbon price was repealed, and now we have a situation where those very same people are going out and taking away the capacity for low-income earners to get an additional tax break—in order to facilitate the wealthiest people in this country becoming wealthier; that is, the big miners in particular. Those same people—and it was every one of the people in the Liberal Party, every one of the Nationals; everyone who was in the Palmer United Party at the time; all of the Independents—were all sitting there abolishing the carbon price. And now, in the face of a huge gap in the budget—deliberately created by the Treasurer and the Prime Minister— they are saying to low-income earners across Australia: 'we are not going to honour the increase in the tax-free threshold; we would much rather see the pockets of corporate Australia get fatter at the expense of ordinary people'.

That is why the Greens are going to stand here and oppose this legislation. We are going to stick with our commitment to Australians—that is, we are going to say that the big polluters should pay their way. We did not support an $18 billion hole in the budget over the forward estimates. We are going to remind Australians that they have not got the windfall gain that they thought they were going to get—because the Prime Minister misled them every step of the way on the impact of the cost of pollution. And now the Australian people are inheriting the cost of pollution. The extreme weather events are going to cost Australians with their lives as well as their livelihoods—while those people who have benefited from the abolition of the mining tax and the carbon price laugh; while they insulate themselves from the cost of pollution as they watch an overwhelming majority of people suffer.